One New Client – By The Numbers
Sometimes numbers can tell a story faster and more clearly than 1,000 words.
This is a quick view of the progress we have made with a Food & Beverage industry client by highlighting and comparing the two most vital numbers over a period of time. These are the actual results of our advertising management with a new client.
March 2022 (the beginning):
For every 1,000 visitors to the website from Google Ads, 18 were making a purchase. Revenue generated was $1.40 for every $1 spent on ads.
July 2022 (four months later):
For every 1,000 visitors to the website from Google Ads, 79 were making a purchase. Revenue generated was $11.71 for every $1 spent on ads.
We focus on the rates so you can focus on the dollars!
Here are the results of the 1st week
We focus primarily on the improvement of two numbers, A & B in the above example. Both of those numbers are rates that are independent of any budget.
The number identified as A is the click conversion rate. At 1.82%, slightly less than two people for every hundred visitors were actually buying something (converting).
The number identified as B shows the dollars of revenue for every dollar spent on advertising. In this case, it’s $1.40 of revenue for every dollar spent on advertising.
Unless the profit margins are extremely high, and they are not in this case, you can see that the ad campaign actually lost money in its first week.
Just so you know what the other numbers are:
- Impressions are the number of people that viewed the ad.
- Clicks are the number of people that actually clicked on the ad.
- CTR is the click-through rate. In this case, 55/1015.
- Cost is the budget set by our client.
- Conversions are the number of people who purchased something. A conversion can be anything we set it up to be. For example, it could be filling out a form on a website that’s trying to get sales leads.
- All Conv. Value is the total dollar value of all of the conversions.
Fast forward to four months later
The conversion rate improved to 7.89% from 1.82% in the first week. That means for this week, almost 8 people out of 100 made a purchase. That’s 4x what it was when we started.
Every dollar spent on advertising returned $11.71. Not only profitable, but we can increase the budget and know this company will make more money. That’s an improvement of over $8 of additional return for every dollar of advertising.
Our entire success with any account depends on one thing – constant improvement. It doesn’t matter where you start, all that matters is that constant improvement in rates will improve any account’s actual dollar value returns.
It’s our job to manage the rates. It’s our client’s job to determine how much they want to spend. However, if you are getting $11.71 in return for every dollar of advertising, most business owners would like to take full advantage of that.
That introduces the concept of scaling, which presents its own challenges, however, we recommended a substantial increase in the budget at the time of the second set of data above.
Are These Good Numbers? Average Numbers?
An independent company called LittleData released a survey at the same time as the data you see in the second image above. Littledata surveyed 630 Food and drink stores in July 2022 and found the average conversion rate for Food and Beverage was 1.8%. We achieved 7.89%.
What is a good conversion rate for Food and Beverage?
Anything more than 4.5% would put you in the best 20% of Food and drink stores we benchmark for conversion rate, and more than 6.2% would put you in the best 10%.
The data you see displayed above is part of a report that we have created for our clients. We can deliver our reports over almost any time period you would like.